Alternative Energy

1
Alternative Energy

• Has the time arrived to promote the
  opportunities, attract investments and market
  collaboratively?
• Anton. Kuipers
• Director Business Development,
• Leading Edge British Columbia

2
Smart Energy Markets closest to realize growth

• Smart Energy market is estimated at 15.0 billion
  worldwide
• Digital applications
• Aging infrastructure
• Decentralized power generation
• Power balancing
• Government policies
• Major drivers for the market

3
Is there an PNW energy industry?

• The industry exists but is not well known as a
  source for energy technologies, with exceptions
  for some strong market leaders
• We have the infrastructure for growth, but
  collaboration is needed in the PNW
• Deal flow and investments are needed for industry
  growth

4
Pacific Northwest Companies

• Doing 2.0 billion of business
• World class research facilities
• Experienced in transmission, distribution and
  power generation
• Creative solutions in alternative energy
• Transferable private sector skills
• Environmentally conscious industry
• Ideal test bed for power infrastructure

5
Industry is facing challenges

• Access to capital markets
• Lack of geographic proximity
• Bridging valley of death commercialization
• Regional and intra-company rivalry
• No organized clusters to promote
• Underdeveloped industry vision - where can we be
  in 10 years

6
Our strengths our potential

• Greatest potential for economic growth and
  technology investments
• Advanced metering systems
• Utility software
• Grid monitoring
• Transmission, substation and distribution
• Power electronics
• Building automation
• Energy Management systems
• Alternative energy sources fuel cells, solar,
  wind, small hydro, biomass to energy

7
Alternative energy opportunities

• Collaboration between players is needed
• Fuel cell urban and transportation
• Solar
• Small hydro
• Biomass to energy
• Wind
• Tidal
• Challenge - to establish a major anchor in
  British Columbia with international reach,
  technology, financing and engineering capacity

8
Immediate opportunities

• Olympics 2010
• Positioning and demonstrating our collective
  alternative energy solutions
• Pacific Northwest Opportunities
• Selling within the PNWER
• US / Canadian 15 billion plus market
• Are we visible enough?
• Do we have venture capital exposure?
• Can we overcome buyer resistance?
• International Opportunities
• Have they heard about us?

9
Immediate targets to focus on

• Develop fast acting electronic controls
• Integrate communications
• Remote and internet based metering systems
• Two way energy portals electricity and
  communications
• Increased efficiency
• Advanced metering systems, sensors
• Grid planning tools, design and operations
• Load management systems
• Smart devices, HVAC etc allowing for remote
  operations

10
But we need to be connected

• Market growth will increase with better
  regulations, incentives and financial rewards for
  utilities
• Early adopters are needed
• Increased outsourcing rather then building
  in-house
• Technology verification and risk control is
  essential
• CENTRE OF ENERGY INNOVATION?

11
Shortage of Capital

• Seed capital and venture capital is needed
• Regulations may make reluctant
• Tax credits and incentives are historically not
  the order of the day
• No clear knowledge where the technology market is
  going

12
Other industry hurdles

• Technology commercialization issues
• Many technologies are still at prototype stage
• Absence of large scale manufacturing in the PNW
• Interconnectivity of standards
• Low electrical prices
• Lack of popular appeal
• Lack of marketing skills
• Lack of engineers

13
What to do ..

• Establish a Pacific Northwest energy
  collaboration initiative
• Increase test beds
• Establish investor outreach programs
• Develop centres of innovation
• Collaborate in promoting and marketing the
  industry capacity
• Collaborate in stacking RD dollars
• Educate the consumer
• Increase workforce training

14
What are investors interested in What is HOT?

• Long term optimism with short term worries
  ramping up production and shortage of capital a
  concern
• Wind sector will grow, but no new technology
  break through that offer venture cap returns
• Solar slow with incremental improvements
• Fuel Cells beginning to find a niche
  application, mainstream success a decade away
• Smart Energy huge potential industry will
  consolidate

15
Capital markets

• Capital markets are still seen as risky, mergers
  and acquisitions may provide exit strategies
• Investors are neutral to positive on the
  Pacific Northwest
• Investors indicate that clusters are needed
• Clusters can generate increased market access

16
Market barriers

• Regulatory issues may inhibit investments
• Lack of price signals may skew markets
• Lack of market access, slows industry progress
• Growth is essential but investors must be
  attracted
• Market incentives are critical for success of
  alternative energy tax credits to municipal
  development incentives

17
We have work to do!

• Industry/technology providers recognize that
• Funding sources for commercialization are
  limited
• Reduce Risk in technology commercialization
• Industry must be promoted collectively,
  nationally and internationally in lobbying,
  marketing, investment attraction, skills
  attraction etc..

18
Collective action

• Regulatory issues facing commercialization
• Uncertainty too many levels to comply to
  convince
• Market fragmentations
• Regulatory uncertainty (changes/alterations) or
  newly passed laws are rescinded
• Testing for permitting, customers and investors,
  lack of sites, compliance relief for
  demonstration projects
• Can a centre of innovation be a means to overcome
  barriers?

19
Collectively action

• Technology Lock In create a market pull
• Non compliance concerns results in absence of
  market pull
• Performance based standards do not require
  specific technologies
• Reluctance to depart from old technology, even if
  cost effective
• Buyer and investor risk avoidance
• Innovative approaches require exemptions
• How can we create a market pull together ?

20
Collectively action

• Lack of Information deal stoppers for
  investors
• Accurate market information is essential
• Energy technology applications need clarification
  
• ROI for innovative energy technologies not well
  documented
• Government technology commercialization support
  is essential
• Early stage company communications needs to be
  managed
• Can a Centre of Innovation and Leading Edge
  British Columbia form a partnership in support of
  your industry?

21
Collective development

• Market Intelligence to reduce risk for investors
  and buyers
• Provide reliable and realistic market
  intelligence
• Focus on commercialization rather then the
  technology
• Overcome risk for buyers third party
  verification
• Demonstrate cash flows for a venture capital
  company or bank
• Seek out partnerships to reduce risk
  alliances
• Venture capital companies presentations what
  would make them excited to invest in your company
• Leading Edge British Columbia is ready to work
  with the Center of Sustainable Communities Canada
  is your company ready and committed?

22
Who is Leading Edge British Columbia?

• Leading Edge British Columbia is a partnership
  between government and industry
• We are not-for-profit marketing organization to
  market British Columbia as a premier destination
  for technology enterprise to
• investors,
• entrepreneurs,
• site selectors and
• potential technology recruits.
• We work with industry in a targeted fashion

23
What are Leading Edge British Columbia
Objectives?

• To raise the profile  and awareness of BC
  technology-based opportunities among Canadian, US
  and international targets
• To promote BCs comparative advantages as a
  destination for high technology investment,
  development employment
• To attract new technology companies to BC, while
  retaining its existing base
• To increase technology investment and recruitment

24
Leading Edge British Columbia Focus?

• Our focus is on 6 major industry sectors
• Life sciences
• Alternative energy
• Environmental technologies
• Information Communications Technology
• New media
• Wireless
• Support will be provided if industry is committed
  to work within clusters/alliances.

25
Where does Leading Edge British Columbia Fit?

• Promote selected industry cluster to venture
  capital companies/financiers
• Promote the capacity of the industry and creation
  of clusters
• Encourage establishment of centres of innovation
• Ready industry to become venture capital
  candidates
• Create international marketing alliances to
  increase industry success in selected
  initiatives
• Encourage deal flows - linking technology
  demonstrations to capital and investors
  community
• Provide support to alliances or formation
  thereof
• Promote British Columbia to attract new
  investments and business that can strengthen the
  industry and to create critical mass

26
Near future initiatives

• Globe 2004 largest Western Canada Pavilion an
  alliance with four western provinces and WDO
• Alternative Energy Venture Cap forum
• Smart Energy Venture Cap Forum July PNWER
• Bio-Partnering Investment Forum
• Establishment of Private Public Partnership for
  centre of Environmental Innovation
• Contract Research Consortium an alliance to
  attract international projects under
  consideration
• Establishment of an Water/Wastewater Alliance
  under consideration
• Establishment of E-learning marketing alliance